The Senate Finance Committee held a hearing yesterday to examine the administration’s approach to trade policy, and heard testimony from U.S. Trade Representative Robert Lighthizer. Farm state lawmakers expressed concern regarding agriculture and NAFTA renegotiation, admonishing the executive branch to "do no harm" with respect to gains in agricultural trade that have resulted from the agreement. Timelines for the renegotiations were also discussed, as well as agricultural trade issues with China. Potential future bilateral trade negotiations were also mentioned.
Wall Street Journal writer Jacob Bunge reported late last week that, "Friction between the U.S. and Mexico over trade is starting to cut into sales for U.S. farmers and agricultural companies, adding uncertainty for an industry struggling with low commodity prices and excess supply. Over the first four months of 2017, Mexican imports of U.S. soybean meal—used to feed poultry and livestock—dropped 15%, the first decrease for the period in four years, according to data from the U.S. Department of Agriculture. Shipments of U.S. chicken meat fell 11%, the biggest decline for the period since 2003. U.S. corn exports to Mexico declined 6%. Mexico is the largest U.S. export market for those commodities."
Andrew Soergel reported earlier this week at U.S. News Online that, "As President Donald Trump's administration sifts through its trade toolbox, preparing to tinker with the North American Free Trade Agreement, the agriculture world is holding its breath."
Mary A. Marchant indicated recently at Choices Online that, "International trade deficits have recently been reputed as 'bad' for the economy; however, agriculture has posted a trade surplus since 1959. For U.S. agriculture, trade represents 20% of farmers’ income on average, and more for specific commodities—70% for cotton and tree nuts; 50% for wheat, rice, and soybeans: and almost 20% for meat and dairy products. Thus, tossing trade would be comparable to U.S. farmers destroying 20% of their yields. China, which has advanced to become the United States’ largest agricultural export market in an unprecedented time frame, plays a key role in the economic wellbeing of U.S. agriculture."
Shawn Donnan and Jude Webber reported on Thursday at The Financial Times Online that, "Donald Trump has fired the starting gun on renegotiations of the North American Free Trade Agreement with Canada and Mexico, with his administration notifying Congress on Thursday that it planned to begin formal talks as soon as August."
Donnelle Eller reported on the front page of Friday's Des Moines Register that, "Opening markets for U.S. corn, soybeans and other farm goods would get more attention under a major reorganization proposal Thursday from U.S. Ag Secretary Sonny Perdue, who wants to create a new undersecretary for trade. With the farm downturn entering a fourth year, ag groups lauded the move."
Secretary of Agriculture Sonny Perdue visited an Iowa farm on Friday and took questions from producers. In his remarks, Secretary Perdue addressed a number of issues; today's update focuses more narrowly on his comments relating to trade and biofuels. Also, Secretary Perdue was in Arkansas on Sunday to survey flood damage with Arkansas Governor Asa Hutchinson.
During last week's tumultuous developments on trade, news reports indicated that Secretary of Agriculture Sonny Perdue was providing President Trump with data driven advice with respect to NAFTA and agriculture, and urged him not to trigger a U.S. withdrawal from the trade accord. Nonetheless, recent remarks from a Senator from Mexico regarding corn imports, and potential NAFTA renegotiation issues means trade policy will likely remain an ongoing concern for Illinois producers and farmers throughout the U.S.
Recall that a FarmPolicyNews update last week noted that a trade dispute with Canada over dairy policies related to ultra-filtered milk is adversely impacting some dairy farms in Wisconsin, Minnesota, and New York, and some of these dairy farms could be forced out of business as a result. Today's update highlights additional news developments on the Canadian dairy dispute, including remarks on the issue from President Trump, as well as concerns the U.S. dairy sector has with exports to Mexico.
Many agricultural producers have expressed concern over the direction of executive branch trade policy since January. These apprehensions may not be universally shared in all quarters of Rural America; however, tariffs and other trade restrictions are important considerations for U.S. agriculture. Today's update looks at recent news items on trade, with a focus on corn exports, ethanol byproducts and beef.